Google is now the hammer for those companies wishing to mask their true star ratings in public websites. Google explicitly states that if you are suppressing or gating (filtering) your negative customers away from taking a survey with your company, you can be banned entirely from Google My Business. This threat is the equivalent of being banned from Google because no longer will your company rank highly nor will it have the full representation of your company profile compared to your competitors.

Research providers who are offering “review gating” services (Avid Ratings prohibits this behavior) are now shutting down their services for fear of being sued by their clients for getting them banned from Google My Business. Just this week alone several popular survey providers and reputation management companies have notified their clients that the review gating portion of their service is no longer available. Unfortunately, some of the smaller homebuilding review management providers have not become aware of this change and are effectively putting their clients in harm’s way. Builder beware… Avid has been warning companies for many years of the impact of filtering reviews would have on their business. There are no legal shortcuts to simply improving your organization and delivering an exceptional customer experience.

We are proud to have assisted Speaker Paul Ryan in the passage of The Consumer Review Fairness Act (CRFA) which passed in December 2016. It, unfortunately, has taken until April 2018 for the world to take notice of this new law and position themselves accordingly. We are grateful to Google for recognizing this law and enforcing it with its review gating prohibition on its search platform – the largest search platform in the world.

It’s a common misconception that millennials have little interest in homeownership when quite the opposite is true. In fact, according to new data, 80% of millennials would like to buy their own homes but are barred by economic factors that delay the buying process. However, as more millennials saturate the market, they are also expecting to leverage the most advanced technology when making purchasing decisions. This includes ease of access technology such as virtual reality (VR) for touring homes.

VR technology has been positively trending for the last few years as it becomes less expensive and more available to those not in tech industries. The housing industry is a good example of this. Homebuilders have already begun to embrace VR technology as a way to enhance the customer experience and jump start the buying process. With almost 95% of homebuyers using the Internet to look for homes and 51% purchasing homes they have found using the Internet, it makes sense that VR technology, a highly digital medium, is incorporated as well.

Millennials are eager and accustomed to immersive and interactive marketing. What are you doing to keep up with one of the fastest growing real estate constituencies?

As social media becomes more prevalent and accessible in our everyday communication, it’s inevitable that social media giants like Google, Facebook and LinkedIn start to seep into a variety of different industries, including housing. The question is whether this will have a positive or negative impact on the market and how we can combat their impact to make sure our clients remain successful for years to come.

Recently, Business Insider published a feature highlighting Google’s plans to build a 3.6 million-square foot, 3-neighborhood development in Mountain View, California, a small tech-focused community near San Francisco. They hope to help alleviate the affordable housing crisis in that area, as 20% of the homes will be priced below market rate.

On the same note, Facebook has announced plans to begin construction of a village that would feature not only housing, but retail, grocery, a hotel and more. The social media giant purchased 59 acres of land in Menlo Park, California in 2015, and it was recently confirmed that this location is where the new community will be built. Once complete, the community will accommodate approximately 35,000 people.

Another social media giant, LinkedIn, has also begun dabbling in the housing market. In December, they gave $10 million to a program that works toward building affordable housing in the Silicon Valley. The project allows housing developers to access short-term loans that help them complete housing projects faster and more efficiently.

While we don’t know how large their reach in the housing industry will expand or if there will be a direct impact for our clients, it’s important to keep an eye on the housing projects being funded by these social media giants. To read more about the communities and projects, read the full Business Insider article.

Building new homes means managing hundreds of processes while assembling thousands of components. Components are a combination of natural, manufactured, pre-fabricated and human-assembled elements. The construction process spans several months in conditions that may include scorching heat, drenching rain, gusting winds, frigid snow or anything in-between. It is not surprising that Dr. Jack Revelle, Six Sigma expert and quality guru, notes that “the average home has more than 60,000 points of failure during the building process” because building homes is not an easy sport.

Stopping at Third Base

In light of the complexities of home building, it seems reasonable to think that making it to closing with only a handful of items remaining as incomplete or deficient should be considered a victory. Unfortunately, homebuyers rarely look at what has been accomplished, but rather what remains incomplete when they receive the keys for their new home. A builder with a short list of deficiencies at occupancy may view that as a “win,” but most homebuyers score that less generously in customer satisfaction. “Stopping at third adds no more to the score than striking out. It doesn’t matter how well you start if you fail to finish,” according to major league baseball player Billy Sunday.

On the scoreboard of customer satisfaction, there are two key elements in play when homebuyers take possession of their new homes. The first element is the “number” of items that are deficient with the new home. The second element is how home buyers “perceive” that number of items. Even the best builders “leave runners on third base” at times, but customer satisfaction leaders score higher by managing customer expectations and also turning over homes with few, if any, deficiencies.

The Number of Incomplete Items

Survey data from the Avid Ratings “All-Canada” Database shows that 22.2 percent of homebuyers report having “three or fewer” deficiencies at the time of their pre-delivery walk-through, with 2.6 percent of those buyers reporting zero deficiencies. Hopefully the goal for all homebuilders is to have zero deficiencies by closing ─ or preferably by the pre-delivery walk-through ─ however this data suggests that 97.4 percent of home buyers report some deficient items at their walk-through.

In comparison, data from an industry-leading builder in customer satisfaction shows that 55.3 percent of their home buyers report having “three or fewer” deficiencies at their walk-through ─ 33.1 percent better than the “All-Canada” data above ─ with 6.4 percent of their buyers reporting zero deficiencies. A good batting average in baseball is typically above 300 and similarly leading builders are not perfect, but are batting at higher averages delivering deficiency-free homes.

Perception is Reality

Setting expectations for home buyers is a key factor in customer satisfaction, as customer perceptions become reality. Home buyer perceptions about deficiencies at the walk-through are important to monitor and understand. Survey data from the Avid Ratings “All-Canada” Database shows that 71.8 percent of home buyers believe the number of deficiencies at their walk-through was either “about as expected” or “less than expected/no items.” That leaves 28.2 percent of home buyers feeling that the number of deficiencies at their walk-through was “more than expected” or “much more than expected.”

Again in comparison, data from an industry-leading builder in customer satisfaction shows that 85.4 percent of their home buyers believe that the number of deficiencies at their walk-through was either “about as expected” or “less than expected/no items” ─ 13.6 percent better than the “All-Canada” data above. That leaves 14.6 percent of their homebuyers feeling that the number of deficiencies at the walk-through was “more than expected” ─ no home buyers reported “much more than expected.” Even the best builders are not hitting home runs every time they are at the plate when it comes to setting customer expectations, but they are generally leading the league in this area.

Finishing Strong

Managing the complexities of homebuilding should bring the reward of homeowners that are passionate fans, but this is only possible if customers receive complete and ready homes that align with their expectations. Turning over homes with few, if any, deficiencies shows up on the scoreboard through referrals and positive reviews. The finish is always the most important part of the race.

Tim Bailey is Division President of Avid Ratings Canada, a leading provider of customer loyalty research and consulting to the home building industry. Through the Avid system, industry-leading clients improve referrals, reduce warranty costs, and strengthen their brand. He can be reached at tim.bailey@avidratings.ca.

More of our client’s customers rely on finding data, reviews, research and products in the digital space. As homebuyers continue to spend more time on their mobile devices, many companies in our industry are marketing their homes in the same traditional way. Avid understands the need for builders to provide customers with interactive experiences in the constantly evolving digital landscape, and we work hard to do just that with the products and services we offer.

Our team recently attended the 2017 TecHome Builder Summit where we were invited to demonstrate the need for builders to provide their customers with a digital experience. The reality is that customers just aren’t buying homes the same way that they used to. Buyers want to be able to purchase homes the same way they purchase everything else: in the digital world.

Learn more about how we’re trying to help our clients embrace the digital age in this great feature article from TecHome Builder. Read the article here.

Wouldn’t it be great to tap directly into every new review found online at the very minute it was posted? As much as we love buzzing around the internet, we’d prefer to spend our time logging hours on useless YouTube videos rather than combing through every new review. We imagine you share this sentiment, which is why you might appreciate Avid’s Web Monitor™, an add-on part of Avid’s GoSocial™ program. Gain mission-critical information across all online platforms. Here’s how.

Once you’re logged in, you will be taken directly to the Dashboard. (If you do not have this ability, please see your User Manager or contact Avid Client Services for details.)

On the Dashboard you’ll find the Web Monitor; note that it will alert you if you have any new reviews pending.

From here, you’ll be able to quickly and easily scan through new reviews aggregated from online. Web Monitor allows you the opportunity to see reviews posted from public social media pages. (i.e. Facebook, Google, Houzz, Yelp!, etc.) in a real-time manner.

Managing Your Reviews, All in One Place

Respond Quickly ­­– Let no reviews fall through the cracks. Following up quickly insures that if a negative comment were to arise, you’d be able to handle it before it ballooned into a larger problem.

Gain a Comprehensive Understanding – You already have the pulse on what consumers are saying, but Web Monitor will allow for a comprehensive review. Couple this with the other tools with Avid’s GoSocial suite to stay on top of your online presence.

Only “customer-obsessed leaders” can create customer-centric companies. There are many great examples of these types of leaders including Walt Disney, Howard Schulz of Starbucks, Jeff Bezos of Amazon, Tony Hsieh of Zappos, Horst Schulze of Ritz Carlton and countless others. Each of these leaders have very different businesses and often very different customers. They do, however, all share the same unwavering understanding that customers are the most critical asset in business. The leaders of some of today’s most successful homebuilding companies also share a similar passion with these customer-obsessed leaders from other industries. Customer-centric homebuilders have leveraged the customer experience as a key differentiator from the competition and the effort is generating great returns.

Working Outside-In

While many traditional companies tend to work from the “inside-out,” companies that are true customer experience leaders build products and design processes working from the “outside-in.” Many traditional companies strategize from behind closed board room doors on how to improve products or processes. Those companies then move outwards to broadcast those ideas to customers with the hope of uptake and success. To work from the “outside-in” means involving or even collaborating with customers and then taking the heightened understanding of customer needs back into product and process development.

Keeping profound customer needs in the crosshairs of every business decision is what differentiates many successful companies from their competitors. The leaders of these types of companies recognize that this feat requires more than just assembling a team willing to listen to customers. It takes a company culture that craves to truly understand customers.

The “Empty Chair”

There are few business leaders more obsessive when it comes to serving customers than Jeff Bezos, Founder and CEO of Amazon. Bezos is passionate about customers and works relentlessly to foster a company culture that shares his passion. Bezos is well known for leaving one seat open around the table in a meeting and letting all participants know that seat is for their customer, “the most important person in the room.” This “empty chair” example has been discussed in numerous articles and interviews about Amazon and illustrates just one of the differences in the Amazon-way of thinking.

Nevertheless, it takes much more than just symbolic gestures or kindhearted mission statements to create a customer-centric culture in a company. It takes leadership, commitment and meticulous practice. Amazon is reputed to require all employees and managers, including Bezos, to spend two days per year in call-centre training. The objective is to provide each team member with front-line exposure to customers to help develop an increased understanding of customer needs throughout the company. That front-line exposure and enhanced customer understanding then flows back into each area of the company. These types of activities help to infuse Amazon’s decision-making process with “customer desires.” Several progressive homebuilders have adopted similar practices and have all team members spend time in customer-facing roles to enhance customer empathy within the company.

People Passion

“When you’re surrounded by people who share a passionate commitment around a common purpose, anything is possible,” according to Howard Schultz, Chairman and CEO of Starbucks. Loyalty leaders have found a way to convey a vision, create a passionate team and nurture an environment for synergy ─ where the whole is greater than the sum of the parts.

Some common beliefs and practices shared by many customer-obsessed leaders include:

Customer Obsession Delivers Returns

“You can design and create and build the most wonderful place in the world. But it takes people to make the dream a reality,” according to Walt Disney. Disney was a true pioneer in customer-obsessed leadership and many other leaders have followed that path. These bold leaders have proven that customer-obsessed leadership not only results in increased customer satisfaction, but it also delivers tremendous returns.

Tim Bailey is Division President of Avid Ratings Canada, a leading provider of customer loyalty research and consulting to the homebuilding industry. Through the Avid system, industry-leading clients improve referrals, reduce warranty costs, and strengthen their brand. He can be reached at tim.bailey@avidratings.ca.

Ask yourself how often a customer review or product star rating has influenced your purchasing decision. Many of us have come to trust and rely on customer online reviews as it offers peace of mind – especially when it’s something that we haven’t purchased before. If a business removes negative reviews or falsifies the information shared by a consumer, the impact can be far greater than simply a loss of business or a wavered purchasing decision. In an article published about TripAdvisor, a popular online travel resource, we’ve learned that reviews posted by travelers on the site were removed by the company, and the reviews could have kept travelers out of harm’s way.

The TripAdvisor news is a wake-up call for all companies who are not aware of the Consumer Review Fairness Act. The federal law protects consumers’ ability to share their honest opinions about a business’s products or services and prohibits companies from suppressing negative consumer reviews. For many, this seems obvious but TripAdvisor was regularly allowing clients to suppress negative feedback from consumers on the TripAdvisor website, jeopardizing the safety of travelers to certain areas in Mexico. This is wrong on many fronts and TripAdvisor should be held accountable for allowing this to happen.

In this case, the lesson for the homebuilding industry is that review washing is illegal. The Consumer Review Fairness Act is a federal law being prosecuted by the Federal Trade Commission (FTC). Furthermore, if you are using a survey system that simply makes it “easy” for you to suppress your negative reviews from appearing online, you need to stop engaging in that practice and likely switch providers. Your current survey company could be the next TripAdvisor and with it your surveys could cease to show up at all online. We know consumers depend upon verified customer reviews, and without them, your company could suffer significant damage. Worse yet, you could become the poster child for the FTC on review washing and that would be bad for the entire industry.

There is no easy quick fix to bad reviews and if someone is selling you that option, buyer beware. There are safe and legal options to manage your reviews that are fully compliant with federal laws. Seek a provider who understands this and can keep you in safe harbor.

How easy is it for customers to do business with your company? Reducing customer effort is an important part of creating a positive customer experience. A fundamental reason that businesses exist is that they solve problems for customers. Economies of scale, expertise, and efficiencies furnished by businesses provide various solutions to consumers, such as availability, lower prices, faster production, better design, improved quality, and more.

Home Problem Solvers
Home builders solve problems for home buyers every day. For example, homeowners may be outgrowing an existing home due to a growing family. Or maybe a work relocation is creating the challenge of finding a home in a new city. Or perhaps empty-nesters are faced with the dilemma of down-sizing to a smaller home to free-up equity for retirement. Regardless of the “shelter-related” problem, home builders can provide solutions for customers.

In the process of resolving their home-related problems, however, some home buyers complain of being burdened with a host of different problems during their new home journey. Are the complications and complexities of home building tidily hidden “backstage” in order to make the customer-facing aspects as easy as possible? Few would suggest that home building is easy, but the magic comes from making a customer’s journey feel that way.

How it Feels to be a Customer
Purchasing decisions are made based on a company’s reputable brand, quality product, great value, or a combination of attributes. Customer memories, however, come from how it “feels” to do business with a company. “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel,” according to prolific writer Maya Angelou. How does it “feel” to be a customer of your business? This is an important question because customers remember that “feeling” and it impacts their long-term loyalty.

Is it an arduous journey to be a customer with your company? Whether the answer is yes, no or maybe, it is a valuable exercise to regularly review your customer’s journey ─ closely examining the journey to find any ways to make it easier to do business with your company.

Find the Friction
Analyzing the customer journey means examining every customer touch-point in terms of process, people, policies, product, and communication. The objective is to uncover any friction currently present in those touch-points which may be causing additional customer effort. After unearthing those pain-points, it is then necessary to implement solutions to smooth out each touch-point. These improved touch-points can then be “stitched” together to enable a holistic review of the entire customer experience to ensure that customer effort is minimized throughout the journey.

Some valuable sources of information which can help builders “find the friction” in the customer experience include:

Front-line team members: Those closest to the customers have a wealth of knowledge on areas of customer frustration.

Trades & suppliers: As an extension of a builder’s team, trades and suppliers often have important insight regarding measures that may be creating unnecessary customer effort.

Make it Easy
Building a customer journey that reduces customer effort means removing obstacles or barriers in processes. It also means having a team that is able to understand the personal and emotional needs of each customer and connect at that level. Communication channels must also be in place to cater to the uniqueness of every customer ─ there is no one-size-fits-all communication channel to satisfy today’s consumers. Most importantly, an environment of continuous improvement must be encouraged in order to learn from mistakes and use that knowledge to head-off problems for future customers.

Mike Wittenstein is retail customer experience strategist and designer at Storyminers and he sums things up succinctly with the following equation:

Keeping this equation in the positive means ensuring that everything a builder does “for” a customer is greater than what is done “to” a customer during the new home journey. There is nothing more powerful for business success than a mass of customers that feel great about their experience.

Tim Bailey is Division President of Avid Ratings Canada, a leading provider of customer loyalty research and consulting to the home building industry. Through the Avid system, industry-leading clients improve referrals, reduce warranty costs, and strengthen their brand. He can be reached at tim.bailey@avidratings.ca.

Success in homebuilding tends to vary by market area in today’s industry. In weak markets, success may be the ability to reposition for market uncertainty. In areas of mediocre market activity, builders that are maintaining or gaining market share may be the models of success. In robust markets, success may mean keeping pace without suffering customer experience chaos. Regardless of market conditions, all homebuilders can accelerate success by focusing on highly qualified prospects.

The No-Cost Conversion Increase
Advertising and marketing are crucial for attracting new customers, however, there is a way to significantly increase the conversion rate of prospects into actual homebuyers and it doesn’t involve a single advertising dollar. The secret is “maximizing referrals” and as obvious as that sounds, it requires innovative systems and processes.

Many homebuilders have sales teams trained to ask prospects how they heard about the builder. Typically, this information is used to determine the effectiveness of various marketing channels, such as social media, print media and other advertising. When prospects mention that they were referred by a friend or family member, that fact may be noted but it often dies there. However, this information is some of the most valuable information for a sales team to leverage.

Profitable Prospects
The reality is that not every prospect has the same likelihood of buying. A marketed prospect who has done minimal research before visiting a sales center is at the earliest point in the buying cycle. Comparatively, a prospect who has researched a builder’s marketing, website, online reviews and more, is likely to be further along in the buying cycle. But the prospects who are most likely to buy are those who have been referred by family or friends. Referrals are “third party endorsements” that create the most cost-efficient, profitable and loyal sources of new business. Referral business delivers the highest return on investment by reducing sales expenses and shortening sales cycles. Based on research conducted by Avid Ratings, referral prospects are twice as likely to make a purchase within six months versus marketed prospects. One particular builder even found the conversion rate of referred prospects to be three times higher than marketed prospects.

The closing ratio for non-qualified leads is 10 percent, versus 60 percent with referred leads, according to sales trainer and author Tom Hopkins. This reinforces the argument that investing resources into identifying and servicing referred prospects will provide big returns. Top-performing builders in customer satisfaction are best positioned to focus on referred prospects and reap the higher conversions that result and this comes down to three simple steps.

Step One – Identification
The first step is to utilize a detailed tracking system for referrals. Not only tracking which prospects were referred but also who referred them, when the referral took place and other key details. The power of today’s CRM software products make this task rudimentary, yet it is surprising how many builders fail to collect, compile and leverage this critical information.

Step Two – Sales Strategy
Even the most thorough information still needs to be acted on and timeliness is critical. Hundreds of thousands of dollars may be sitting unrealized in CRM data unless a sales team is acting quickly and executing a sound strategy. It takes a specific plan to deal with high-priority referred prospects. This plan is different than one used for other prospects because referred prospects typically have heightened knowledge and trust. Referred prospects come in the door because someone close sent them. Personalizing communications can occur more quickly and mentioning the “referrer” in conversations will help to strengthen the relationship. Not all referred prospects will generate immediate business but they all have higher potential.

Step Three – Increasing Referral Traffic
After ensuring that a sound system and strategy is in place for referred prospects, the goal is to increase the amount of referrals coming in the door. Having tools that can identify which past customers are “promoter” customers is indispensable. From there, specific strategies can be developed such as incentive programs to referrers or those referred. There may also be opportunities to create “events” that provide venues for happy homeowners to connect with prospects. Many homeowners want to recommend their builder and creating opportunities for that to occur pays big dividends.

Be Referable
Referred prospects are a significant source of business for leading builders and “being referable” is vital. That means building quality homes, providing exceptional customer service and creating outstanding homeownership experiences long after the possession date. With those building blocks in place, maximizing referrals becomes the game-changer in any market conditions.

Tim Bailey is Division President of Avid Ratings Canada, a leading provider of customer loyalty research and consulting to the homebuilding industry. Through the Avid system, industry-leading clients improve referrals, reduce warranty costs, and strengthen their brand. He can be reached at tim.bailey@avidratings.ca.